Understanding Your Insurance Claim After a Storm

In the aftermath of a storm, dealing with insurance can be challenging and confusing. In this blog we will be breaking down what insurance terms mean, how deductibles work, coverage, and why licensed contractors are important in this process.

 

Deciphering Insurance Claims

Meet Mr. Johnson, a homeowner in Iowa who recently experienced a severe storm that caused significant damage to his property. As he begins the daunting task of filing an insurance claim, he encounters a abundance of confusing terms and questions.

 

RCV vs. ACV: Understanding Insurance Terminology

RCV stands for Replacement Cost Value, which refers to the amount it would cost to replace or repair damaged property with materials of similar kind and quality, without deducting for depreciation. On the other hand, ACV, or Actual Cash Value, factors in depreciation and represents the value of the property at the time it was damaged or lost.

 

What Determines Depreciation Factors

Insurance adjusters consider various factors to determine depreciation, such as the age of the item, its condition before the damage occurred, market value, and useful life expectancy. For example, a roof that is 10 years old may have depreciated in value due to normal wear and tear and is subject to 40% Depreciation in the initial claim value.

 

Who Owes the Deductible?

The homeowner is responsible for paying the deductible outlined in their insurance policy. This amount is deducted from the claim payout before the insurance company covers the remaining costs of repairs or replacements.

 

Impact on Claim Payout

When filing an insurance claim, the initial payout may be based on the ACV, which accounts for depreciation. The homeowner is typically reimbursed for the ACV initially. However, if the policy includes replacement cost coverage, the homeowner may be eligible to receive additional funds, “Depreciation Value” to cover the difference between ACV and RCV once repairs or replacements are completed.

 

How Do I Recover Potential Depreciation Value

In some cases, homeowners can recover depreciation if they have replacement cost coverage and actually replace or repair the damaged property for the value of the loss statement. Upon completion of the work, they can submit proof of expenses to the insurance company to receive the remaining amount based on the RCV.

 

Can a Property Owner Pocket Insurance Money?

It is illegal for a property owner to pocket money from an insurance claim that is intended for repairs or replacements. Insurance payouts are meant to cover the cost of restoring the property to its pre-loss condition.

 

Coverage and Additional Damages: Understanding Limits

The insurance claim’s total value might not cover all necessary repairs, especially if more damage is found during the process. In such instances, homeowners may have to collaborate with their insurance adjuster to review the claim and request more coverage if needed. This can be time-consuming, and without a contractor familiar with the process or accurate documentation, additional work might not be covered.

Iowa Laws and Regulations on Insurance Claims

In Iowa, there are specific laws and regulations related to insurance claims, ensuring fair practices and protection for homeowners. Familiarizing oneself with these laws can empower homeowners to navigate the claims process effectively. Iowa Code 103a.71 which states it is not legal to rebate or wave a property owners deductible.

 

How Licensed Contractors Can Help

Licensed contractors play a vital role in the insurance claims process. They not only understand the intricacies of insurance documents but also ensure that all required work outlined in the insurance claim estimate is completed to industry standards.

 

Resources for Homeowners: State and Federal Assistance

To assist homeowners like Mr. Johnson, here are some valuable resources:

– Iowa Insurance Division: https://iid.iowa.gov/

– Federal Emergency Management Agency (FEMA): https://www.fema.gov/

– National Association of Insurance Commissioners (NAIC): https://content.naic.org/

By utilizing these resources and teaming up with an experienced licensed contractor like Superstorm, adept in managing insurance claims, homeowners gain the confidence to navigate the claims process smoothly. This strategic collaboration ensures the restoration of their property to its pre-loss condition with assured precision. With this approach, property owners can minimize out-of-pocket expenses while ensuring their home is restored effectively.